In an effort to expand the methods by which consumers (both individuals and businesses) purchase goods and services, merchants or vendors have added new communications channels which enable consumers to buy goods and services without personal contact with the merchant or vendor. As used herein, the term “consumer” is not limited to a person but includes any individual or entity seeking to purchase something from another. The term “merchant” or “vendor” includes individuals and entities who sell or deliver any type of good or service including informational services, data, images and entertainment services, such as radio, television, video, gaming results and gaming events, event results, etc. With the proliferation of new ways for consumers to purchase goods and services from merchants, it is increasingly difficult to authenticate the person seeking to execute a financial transaction in order to complete the purchase.
As an example, if a person seeks to purchase goods or services over the global computerized network, commonly called the Internet, that person may access the Internet via a personal computer, a cellular telephone (properly configured), a personal digital assistant (PDA), or other Internet enabled device. Surfing or browsing on the Internet is essentially an anonymous activity. However, the communications device selected by the person/consumer sometimes carries with it communications channel data. Once the consumer has selected the goods or services, the person may have several different types of financial instruments which permits him or her to purchase the goods or services. These financial instruments include credit cards, debit cards, checking accounts with electronic access (electronic checks), charge back systems linked to land line telephones, charge back systems linked to cellular telephones and potentially other electronic payment systems linked back to financial assets of the consumer.
A problem arises in clearing or authenticating the identity of the person with the requested financial transaction. It is well known that the proliferation of communications channels and the proliferation of new mechanisms to pay for goods and services results in greater identity theft, identity fraud, credit card fraud and other financial transaction fraud. If a vendor or merchant could identify the person and link that person to the financial instrument presented for the financial transaction, the merchant would be assured that the person's identity was authenticated and that the financial transaction is a valid and acceptable transaction.
Rather than implementing an authentication system, merchants and vendors typically contract or arrange with third parties to process financial transactions over the Internet and other electronic networks. Therefore, a particular financial transaction for a particular good or service may entail the consumer, the merchant, a third-party payment processor, and a financial institution or organization which provides the consumer's funds to the merchant based upon the completed financial transaction. Further, authentication processes are utilized by financial institutions issuing the credit cards and other financial instruments.